The drop was more steep when compared to the 43 per cent growth registered by the industry during the first-half ending September 1998 over the first half of the previous year.

In value terms, the industry registered a paltry 15 per cent rise over the previous year. The total size of the industry sales in 1998-99 was Rs 7,508 crore as compared to Rs 6,530 crore in 1997-98.

The PC market grew to Rs 5,348 crore during the year as compared to Rs 4,655 crore in 1997-98. Of this, the desktop market grew to Rs 4,334 crore from Rs 3,700 crore in the previous year.

According to the second half-yearly performance review of the computer hardware industry for 1998-99 undertaken by Indian Market Research Bureau (IMRB) on behalf of Manufacturers' Association for Information Technology (Mait), the total desktop PCunits sold in fiscal 1998 was 1,027,190 units as against the 800,000 during fiscal 1997. Over 82 per cent of the PC sales were in the corporate and government segments, while the household sector contributed only 18 per cent of the overall business.

While the sales in the corporate and government sector grew by 34 per cent over the previous year, the growth in the household sector was a poor 7.6 per cent. The small office (less than 10 employees) grew by a phenomenal 120 per cent.

However, the survey revealed that desktop PC made significant inroads into the towns with 2.5 million and 5 million population. PC population in these segments grew by 49 per cent and 57 per cent respectively. According to the report, the installed base of desktops in town class with population more than 5 million was 673,143 units in fiscal 1998, representing a 19 per cent growth as compared to fiscal 1997.

``While the industry's overall performance has been consistent and positive, it must be noted that the assemblerssector, a significant proportion of which is the grey market, grew by a whopping 49 per cent in the same period. The home PC segment is a high potential segment and contributes heavily to the grey market because of its price sensitivity,'' felt Mait president Hemant Bharat Ram.

In spite of the slowdown in growth, Mait is optimistic of a 50 per cent growth in PC industry if the second report of the national IT task force is implemented by the government.

``The IT manufacturing industry today is fighting for survival. In the short-run, the industry is tiding over the problems of policy upheaval. Neither the Union budget, nor the Exim policy have been conducive to the growth and development of the hardware industry. A turnaround in the industry can only happen if the IT Action Plan-II is immediately implemented,'' said Mait director Vinnie Mehta.

IMRB has been tracking the hardware market for last three years. It was engaged by Mait to undertake the annual survey of the industry last year. For the secondannual survey, the market research agency polled 7,585 people and 2,903 for the home and home office segment. The sampling was done across 16 cities, including the four metros.

The server market grew a whopping 41 per cent from 25,500 units in 1997-98 to 35,900 units in 1998-99, reflecting the growing influence of internet and e-commerce. On the contrary, the notebook market witnessed a 20 per cent slump with the sales falling from 28,750 units in 1997-98 to 22,925 units in 1998-99. The printer market, comprising dot matrix, laser and inkjet printers, witnessed a change in the market mix.